Graham Packaging Company, Inc.
Robbins Umeda LLP Is Investigating Graham Packaging Company Inc. Acquisition for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, is interested in helping shareholders of Graham Packaging Company Inc. (NYSE: GRM). The firm has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the board of directors of Graham Packaging in connection with their efforts to be acquired by Silgan Holdings Inc. (NASDAQ: SLGN).
On April 13, 2011, Silgan Holdings announced they have entered into a definitive agreement under which it will acquire Graham Packaging for approximately $4.1 billion. Under the current agreement, Graham Packaging shareholders will receive 0.402 shares of Silgan common stock and $4.75 in cash for each share of Graham Packaging common stock they hold. Based on Silgan’s closing stock price on April 12, 2011, the transaction implies a value of $19.56 per Graham Packaging share. The transaction is expected to close late in the third quarter of 2011.
The investigation is focused on whether Graham Packaging’s board is undertaking a fair process to obtain maximum value for its shareholders. Three analysts have set price targets higher than the offer price, ranging from $20 to $22 per share. Moreover, on February 10, 2011, Graham Packaging reported fourth quarter 2010 financial results that beat analyst estimates. Of particular interest, each of Silgan’s Co-Chairmen of the Board, R. Philip Silver and D. Greg Horrigan, who collectively beneficially own 29% of Silgan’s common stock, have entered into an agreement to vote in favor of the transaction. In addition, Blackstone Capital Partners III L.P. and certain of its affiliates and the Graham Family, who collectively own on a fully diluted basis 65% of Graham Packaging’s common shares, have entered into agreements to vote in favor of the transaction.
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